In 2022, 5,044,748 new businesses were started in the US. Small businesses help drive the US economy and are some of the largest employers across the country.
Starting a retail business requires serious planning and fortitude if you want your business to beat the statistics for long-term survival.
If you have a passion and an idea, you can turn it into a successful retail business with proper planning. So, what should you do if you’re ready to start your own business?
Read on to learn the things you should consider and do before you jump into business ownership.
Create a Business Plan
Before you ever consider physically starting a retail store, you need to do some planning. Learn from the wisdom of others who have walked that road before. It would greatly benefit you to research expert business tips.
One of the first steps in opening a business should be to create a business plan. This step forces you to work out your plan and organize it on paper.
Most banks and investors won’t do any financing for a business that doesn’t have a concrete business plan in place.
The business plan should outline your business mission statement, goals, and specific steps you’ll use to achieve those business goals.
Consider Your Start-Up Costs
Any business needs money and funding sources to get started. Maybe you’ve been saving to get your business off the ground. Or perhaps you’ll seek a small business loan.
Either way, as part of your business plan, you need specific anticipated costs to get the business going. Let’s take a closer look at what some of those costs will include.
You know the adage, location, location, location. Building a successful retail space means finding a location that attracts customers.
You need to evaluate the commercial real estate market for both what’s available and what it will cost to rent or buy for your business.
You may also run into some renovation costs to set up a location so it meets your business needs.
Once you’ve narrowed down the location, consider rental costs. If you opt not to buy a property, you’ll need to commit to a lease agreement.
Part of your business plan should include what rent will potentially cost for the duration of a lease. You also want to anticipate how much business you need to generate to cover this expense and others.
All businesses have a variety of insurance needs. You’ll need business insurance and liability coverage to cover the property and the goods inside your business.
If you don’t have another avenue to get it, as part of your plan, you must also account for the cost of health care coverage.
Once you start to consider properties for your business, you should be able to get basic utility information for a property. You need to consider your costs for:
- Water and sewer
- Trash pick up
Your utilities, like gas and electricity, will vary greatly depending on the physical size of your location and the climate in which you live. In Southern California, for example, much of the year, you should anticipate needing air conditioning for comfort.
Product and Display
Your need for product and merchandising will significantly depend on if your retail business is product or service-based. Even most service-based companies have some products to sell.
You need to work with vendors and evaluate your start-up costs to stock your shelves. You also need to anticipate costs for displays for the product.
Some small businesses opt to start as one-person operations where the owner handles the business until revenue is coming in. While this might work short-term, it won’t be sustainable long-term.
You need to anticipate your costs for employee coverage. How many employees will you need on the payroll? Do some number crunching to consider how much revenue potential additional employees are? Does this number outweigh the costs?
You’ll have to be prepared for some technology costs for your business. You will need phones, computers, and wifi to run the business.
You need to have a method of payment system in place. A robust retail point-of-sale system not only gives you a means for collecting money, but it usually also provides data collection and customer information security.
One cost that many businesses forget to plan for is marketing. They have the idea and are ready to get started. But marketing costs are essential so others can learn about your business and you can retain returning customers.
You should anticipate marketing costs for:
- Logo design
- Business cards
- Website design and maintenance
You need to obviously also consider any marketing campaigns to get the customers coming through the door. It would be wise to consider your costs for marketing for the first year as part of your start-up costs.
Now that you’ve planned start-up costs, you can see that running a company requires funding. Your business won’t last long if you don’t have a plan for managing the costs.
If you have a solid business plan with all the data for anticipated start-up costs, you can begin to research funding. Will you need a small business loan to get started?
Look for options for new business financing with terms that will work within the framework of your revenue goals.
Find a Business Location
Once you have financing in place, you can begin the actual search for commercial properties that fit your needs. Know ahead of time what amenities are important to you and how much space you need.
Remember, location is one of the most important factors determining whether a business can attract customers. Be particular about where you choose for your business. Look until you find the right property for you.
Ins and Outs of Starting a Retail Business
Before actually starting a retail business, you need to plan for starting a retail business. The more time you spend planning and anticipating your costs and needs, the better prepared you are when you open the doors.
Once you’ve done all the planning, you’re ready for a great commercial property and a proper grand opening celebration. For help finding the best property, call (877) 775-9625 to start your commercial property search.